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Invoice discounting
Access funding against invoices while keeping customer collections within your business.
What is invoice discounting?
Invoice discounting provides finance against eligible unpaid invoices. Your business usually continues to maintain the sales ledger, issue statements and collect customer payments.
The provider advances an agreed proportion of eligible invoice value. Customer payments are handled through the facility’s agreed arrangements. The remaining balance becomes available after advances and charges are accounted for.
Keep control of customer collections
Your team remains responsible for chasing payments, resolving disputes and maintaining reliable records. Funding supports your working capital, but it does not replace effective credit control.
Confidential facilities may be available, so customers may not need to know about the arrangement. Confidentiality depends on the provider and agreement and is not automatic.
Who might it suit?
Discounting may suit businesses with reliable financial reporting and the resources to manage their own collections. The provider will assess the trading record, financial position, customer quality and sales ledger.
Unpaid invoices alone do not guarantee funding. Disputes, very overdue debts, contractual deductions or high customer concentration can restrict the amount available. Discuss these issues before relying on a proposed facility.
Questions to ask the provider
Confirm how customer payments must be routed, what reports are required and how invoice eligibility is calculated. Understand security or guarantees, contract terms and your responsibilities when a customer pays late or defaults.
Compare the full cost: service fees, discount charges, minimum charges and exit costs. Funding availability can change as invoices are raised, paid or become ineligible.
Prepare for your enquiry
Have an outline of turnover, payment terms, outstanding invoices and customer mix available. Recent accounts and an aged debtor report can help with a later assessment.
If you also want help collecting payments, read about invoice factoring. You can compare both approaches in our guide.
Explore your invoice finance options
Tell us about your business, your invoices and what you want funding to achieve.